Business

UK car sales slide 9% in September

New cars Image copyright PA

Sales of new cars in the UK fell sharply in September, a move that an industry body has said will cause "considerable concern".

New car registrations last month numbered 426,170, the Society of Motor Manufacturers and Traders (SMMT) said.

The figure was down 9.3% from September last year, while diesel sales - which have been hit by worries over air quality - fell by 21.7%.

It was the first time in six years that the key September market had fallen.

September is normally a big month for car sales, because it marks a change in the licence plate series that indicates how old vehicles are.

The SMMT said economic and political uncertainty, as well as confusion over air quality plans, had led to a fall in consumer confidence.

However, it praised the trade-in and scrappage deals that many carmakers had made available to UK buyers, saying they were proving popular and should be encouraged.

"September is always a barometer of the health of the UK new car market, so this decline will cause considerable concern," said SMMT chief executive Mike Hawes.

"Business and political uncertainty is reducing buyer confidence, with consumers and businesses more likely to delay big-ticket purchases."

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New car sales in the UK fell have now fallen for six months in a row. The last time there was a decline in September car sales was in 2011, when it fell by a mere 0.8%.

Total car sales so far in 2017 have reached 2,066,411, representing a fall of 3.9% on the same period last year.


Analysis: Theo Leggett, business correspondent:

Registrations of new cars have been declining for six months.

So far, the SMMT has been relatively sanguine about it. After all, 2016 was a record year for the industry. But now there are distinct signs that frustration is setting in.

September is normally a bumper month for sales, because it's when a new number plate is released and buyers like to have the very latest registrations. But clearly the showrooms aren't as crowded as they should be.

Cars are 'big ticket' items - and when consumer confidence is low, sales fall. The SMMT thinks that's what's happening now. It says customers are putting off buying new vehicles, because they're worried about the economy.

Then there's confusion over the government's clean air plans. The SMMT says that the newest petrol and diesel cars shouldn't be affected by any bans, or charges for entering cities - but consumers don't seem to be aware of the fact.

Coupled with the ongoing uncertainty over what will happen to cross-border trade when we leave the EU, it's easy to see why car industry executives might be getting nervous.


Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Car sales remain well below last year's levels, as the inflation-driven squeeze on real incomes makes households reluctant to make major financial commitments.

"In seasonally-adjusted terms, however, we estimate that registrations were 9.7% higher in [the third quarter] than [the second quarter], when sales were hit by April's increase in vehicle excise duty."

Mr Tombs added that car sales had boosted quarter-on-quarter growth in households' spending during the July-to-September period, but were expected to drag on consumption growth for the rest of the year.

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